The franchise fee of $40,000 is below the typical range for home services franchises. What is included in this fee, and are there any additional startup costs not disclosed in the initial franchise fee?
#1
Your technology fee of $650/month exceeds the typical range of $156.50-$599.00. What specific technology services and tools are included, and can you provide a breakdown of how this fee is calculated?
#2
The royalty rate of 5.0% is lower than the typical 6.0-7.0% range for home services franchises. Are there any plans to increase this rate, and under what circumstances might it change during the franchise term?
#3
Your system has grown from 1 unit in 2022 to 15 units currently. What is driving this rapid growth, and what is your sales pipeline and projected unit count for the next 2-3 years?
#4
One unit was terminated and one was closed in the past year. Can you provide specific details about why these units exited, including whether the termination was franchisor-initiated or franchisee-requested?
#5
What financial performance data is available for existing franchisees? Given the Financial Performance score of 40/100 and the absence of Item 19 disclosure, what sales, profit, or other performance metrics can you share with prospective franchisees?
#6
The non-compete period is 1 year, below the typical 2.0 years. Why is the non-compete shorter than the industry standard, and what protections does the franchisor have if a franchisee opens a competing business after this period?
#7
Your agreement includes 20 non-curable default events allowing immediate termination without notice. What are these specific events, and how likely are they to occur during normal franchise operations?
#8
The dispute resolution clause requires binding arbitration with class action waived. Has the franchisor faced any disputes with franchisees, and what was the outcome? Are there any pending arbitrations?
#9
Your agreement requires unlimited personal guarantees from all owners and future owners, plus spouse/domestic partner guarantees. How has this provision been enforced, and can it be modified or limited during negotiation?
#10
The franchisor can designate approved suppliers and require single-source purchasing. How frequently does this occur, and what is the typical markup or cost impact on franchisees for franchisor-approved suppliers versus alternative vendors?
#11
The agreement reserves the right to impose minimum and maximum prices on franchisees. How often are these pricing controls enforced, and what flexibility do franchisees have in pricing their services to remain competitive locally?
#12
Given the rapid unit growth, how saturated is your current market, and what is your policy on encroachment or territorial overlap between existing and new franchisees?
#13
What training and ongoing support does the franchisor provide, particularly for a young system with units averaging less than 2 years in operation?
#14
The transfer fee is $10,000 and renewal fee is $8,000. Are there any other fees associated with renewals, transfers, or contract amendments that are not disclosed upfront?
#15
The termination clause permits 10-day cure for monetary defaults and 30-day cure for non-monetary defaults. What constitutes a monetary versus non-monetary default, and can you provide examples?
#16
With only 15 total units in the system, how does the franchisor ensure adequate support, training, and quality control? What is the franchisee-to-support-staff ratio?
#17
What is the actual cost of the required technology fee, and is this fee bundled with other franchisor services, or is it separately charged on top of royalties and ad fund fees?
#18
Can you provide references from all 15 existing franchisees, including the 2 that exited in the past year? What are the contact details and primary reasons they would cite for their experience?
#19
What happens to the exclusive territory if a franchisee fails to meet minimum performance standards or volume requirements, and are there any performance guarantees built into the franchise agreement?
#20